Budgets | Federal Trade Commission

Every month, Michael ran out of
money just before payday. He had to skip paying some bills
and pay some bills late. He hated that. So Michael decided to make a
budget to see if it would help him pay his bills when
they were due. He wrote on a budget worksheet
how much money he made each month. Then Michael looked at what
he spent the last month. He used those expenses to write
what he thought he would spend this month. His expenses were higher than
his income, which he knew. But now he knew where
his money went. He started cutting. He cut money for eating out,
movie tickets, and other things he wanted but couldn’t
afford all the time. That solved the problem
and even gave him $50 extra for the month. He put $10 back in his budget
to rent movies. And he saved the rest. That month, Michael carefully
followed his budget. If he spent more in one budget
area, he cut from another. He had enough money to pay
all his bills on time. Michael felt much better
with a budget.

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